Global travellers are spending more moolah than ever before, on hotel bookings alone these days. The global hospitality division is all set to observe a record flouting year in 2016. Hotel metrics like occupancy, RevPAR and ADR values are all geared up to break the previous records, as the forecast for the year 2016 is in fine fettle according to the leading hospitality research firm – STR. Another research by Killarney Hotels designates that the global hotel industry revenue might reach $550 billion US dollars by the end of this year.
Accordingly, hospitality providers are chalking out plans to convert the demands of their business and leisure customers into substantial dollars, as they are vying for a slice of the traveler’s expenses. This has been compelling hoteliers to restructure demand generation and revenue-spawning strategies, so as to seize as many new clients and retain existing customers too.
No wonder that one of the biggest challenges hoteliers face is how to make the transition from being a demand generation-focused organization to becoming a revenue-generating organization. Ideally, any hotelier would want to increase their top line (sales) and decrease expenses (which span across both variables and certain fixed costs), in order to witness an increase in the hotel’s bottom line.
- Utilize demand from Inbound marketing to increase your hotel’s top line
Never ever neglect leads from inbound marketing!
First of all, let’s discuss about the role of inbound marketing, in generating more revenue from demand.
Inbound marketing is much in vogue today, but as marketers we need to be educated about how to get the most out of our inbound leads, who have just scouted on your web pages for reviews or price comparison and show a lesser inclination for any revenue generation engagement, until they have advanced way forward in your sales funnel.
“Inbound marketing costs 62% less per lead as compared to outbound marketing.” – Mashable.com
As a consequence, a blueprint is required to capture inbound prospects and crack them into paying customers, generating more revenue for us.
Not only this, we also need to develop an inbound marketing process, that is not just efficient and predictable, but also repeatable in future.
- Create a revenue-generation marketing plan
When a hotel’s occupancy rates and RevPAR rise, it is usually a good indication that the management is performing well.
In order to reach this stage, the hotel’s marketing plan for revenue generation should align with the business priorities and goals, as set out in the main revenue generation plan. Based on that target, you decide to set a marketing team, and accordingly set performance goals for the demand waterfall, including:
- The number of visitors
- Closed deals
All of them are needed to drive the revenue forward and achieve your revenue quota as a marketer.
- Faster lead response time leads to better conversion rates
When you receive an inquiry on your website, a specific response time needs to be set. This can vary from 5 minutes to an hour, and this surely acts as the magic number. You are more likely to qualify the lead in scenarios where your lead response time is faster.
“Responding to leads within an hour generates seven times more conversations” – Harvard Business Review
- More consistent and better the follow-up on leads, better the conversion of leads into opportunities
Marketers live and die by whether their leads turn into sales and eventually into revenue.
So when you have a qualified lead, make sure you have an assigned team whose sole job is to reach out to leads, overcome objections, ensure they are a fit, and get them connected to sales teams for final closure.
They can follow certain lead conversion strategies such as:
- Capturing and logging prospect data into a robust platform (like a cloud-based CRM)
- Carrying out demonstrations
- Leading these prospects to their desired outcome
- Having hotel point of sale displays
- Distributing appropriate press releases and social media posts
- Carrying out effective sales management
- Doing sequential marketing messages
- Setting higher sales targets
- Gathering as well as using testimonials
- Focus on Social Media
From the above points, it is very clear that social media data and customer review analytics need to be effectively used by hotels in order to optimize distribution and maximize revenue growth. This has become a revolutionary trend.
So as a hotelier, you should use your Twitter, Facebook and LinkedIn accounts as well as other digital media channels to grab some buzz for your hotel. You could also spread the word by rendering tips about local events, travel bites, discounts and special offers, to attract guests.
- Improved revenue cycle analytics
Adding another stage between marketing and sales, will help you track conversion rates and other key metrics in a more granular fashion. Which implies that when problems arise, you can easily identify the causes and resolve them faster and with better follow-through than if you bunch together the responsibilities of qualifying and closing leads.
- Keep database updated
Sales Executives are mostly blamed for not updating database and contacts of the leads and prospects in their CRM tool. This exercise becomes much easier with a dedicated database team updating and entering complete information on frequent intervals. This assist the marketing department to get more accurate data to work on and latest information that they can utilise to augment their future lead generation dynamism.
- Optimised Revenue Management
Traditional Revenue Management Systems or RMSs revolve around the creation of complicated pricing strategies based on demand forecasting and generation. For the records, a forecast-based pricing approach might miss the opportunity to make best use of long-standing customer values. After all, it emphasizes only on short-term revenue gains!
In such competitive times of the hospitality environment, hospitality providers need to optimize their revenue management strategy. They can start out by considering the following:
- Hotels can apply data integration plans across enterprise systems, so that they can break down data silos and open up the RMS. This will help them access as well as process Big Data and other complex data feeds in a better way with higher flexibility.
- An automated and advanced revenue management system having a unified interface, can be set up and customized as per the hotel’s business model, to create an intuitive and better analytical experience.
- Sometimes, brand-new and impactful loyalty tactics can deliver unexpected benefits to targeted customers, which help to spawn revenue in the long run.
Above points clearly suggest that a powerful RMS also doubles up as a real-time RevPAR and ADR builder. Such a unified platform smartly integrates customer data, demand generation information and forecasting as well as market analytics (e.g., online travel agencies and global distribution systems), along with other data bites like local events and advanced visualization. Such an analytical study helps hoteliers to seamlessly create opportunities for better room pricing, sturdier loyalty programs and operational enhancements.
- Committing to a better revenue management for revenue generation
We all know that revenue management relies upon your ability to look into both near and distant future, so as to view occupancy demand and making rate decisions. This revolves around measuring reservation booking pace and studying occupancy generators in your area to come up with a smart decision.
Hence, it is always good to commit to learn as well as use revenue management. This helps to increase occupancy and average rates, that equates to revenue. Such a central research might require some effort, but the rewards are always great. Only then will the economy slowly improve and solidify your position in the global hospitality marketplace as well as engender rewards in the long run.
- The human touch enhances lead nurturing
Lastly, whether or not leads are sales-ready, CRM sales team can nurture relationships with each prospect. You can offer more personalized product and present a solution around a lead’s individual pain points, and cultivate future demand.